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BRICS to lend Eskom up to R11.2 billon to lessen pressure on grid

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The New Development Bank (NDB) is willing to lend the power utility up to R11.2 billion (about $780 million) for the maintenance of the power supply infrastructures.

Responding to the dire state of power supply in the country, the NDB, backed by the BRICS nations of Brazil, Russia, India, China and South Africa, is communicating with the government about the possibility of loans that could be used to ease some pressure off the country’s electric grid.

NDB President KV Kamath said the institution is willing to lend Eskom $180 million (about R2.5 billion) to build transmission lines. The institution is also in talks about funding two more projects in 2019. One of the projects would be acquiring retrofitting flue-gas desulphurisation equipment, which would make the Medupi power plant compliant with new environmental standards. Medupi would have about 4 800 megawatts capacity once the project is completed. This would foot a $480 million (about R6.9 billion) bill.

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“Power is now a critical element in South Africa’s infrastructure and at this point in time it is imperative that we work with the government in alleviating this problem,” said Kamath.

The second project would require about $300 million (about R4.3 billion) to improve the country’s battery-storage capacity.

President Cyril Ramaphosa announced during the State Of The Nation Address (SONA) that Eskom would be divided intro three units namely; generation, transmission and distribution. Kamath said the planned division is heartening. “We are equally clear that this won’t happen overnight, so there is always a need to extend a hand during the transitioning process and that’s what we are doing.”

Kamath noted that Eskom’s load would make the majority of the $780 million that the NDB will be lending to South Africa, and that the country will now owe NDB roughly $2.4 billion.

Abenathi Gqomo
[email protected]

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